How to Make Your Digital Banking Proof of Concept a Success

Detective Tools

Editor's note: It’s critical that banks and credit unions complete a successful proof of concept to ensure they select the right digital banking vendor.

Few decisions are more significant for a bank or credit union than selecting a digital banking vendor. In fact, this decision has become just as, if not more, critical as selecting a new core processing platform. Before making such a weighty decision, financial institutions must be sure that a potential technology partner’s platform has the speed, innovation and flexibility necessary for a successful digital transformation.

Discovering whether a potential partner's solution has the desired attributes requires more due diligence than can be gained from a vendor's slideware, brochures, sales demos and even RFIs and RFPs.  A proof of concept provides vendors the opportunity to demonstrate that a live instance of their technology can actually do what they claim it can. Many of the more innovative service providers in the digital banking space are relatively new, and as a result don’t have the proper proof points that banks and credit unions need to make a sound decision. Given the fact that any issue in a bank or credit union’s digital channels can impact thousands of consumers, it is reasonable to request a proof of concept demonstration that validates a vendor's claims.

To complete a successful proof of concept at your institution, here are a couple key tenants to keep in mind:

Clearly define your POC goals

Proof of concepts tend to go much more smoothly when banks and credit unions have clear and precise goals concerning their digital initiative and what they need to see demonstrated in a POC. 

For example, a FI that has a goal of moving to a mobile-first environment likely will want a prototype that confirms a vendor's ability to easily deploy new features and functions into a mobile application that delivers a flexible UX. 

In addition to proving the capabilities of a solution, how a vendor performs is just as important as what it provides.  The cadence, interaction, tone and process shown by the vendor during the prototype will be characteristics that carryover into a conversion project. Failure to clearly define the end game of an institution's digital effort, precisely describe the requirements of the POC and assess the vendor's project skills creates the risk of finding oneself at the end of a proof of concept without arriving at a confident decision.

Though it is tempting, FIs should avoid using the proof of concept as a way to get a “jump” on the full-scale replacement project that will begin after a vendor of choice has been discovered. The purpose of the POC is to answer critical questions on product capability and provide a bank or credit union with the clarity needed to confidently choose a partner they can depend on well into the future.  

Limit the number of vendors involved

Proof of concepts should be limited to one or two vendors. During the due diligence process when banks and credit unions are vetting the technology, philosophies and features of different digital banking providers, they should be able to narrow down the potential candidates based on their institution’s unique needs. If not, the institution probably hasn’t done enough homework into the nuances of each partner and solution.

Financial institutions should also be prepared to pay for the proof of concept. Just as a financial institution wouldn’t offer all of its banking services for free, to expect vendors to devote resources to an institution for weeks at no charge is less than fair and causes vendors to cut corners, diminishing the validity of the POC.

Make sure necessary personnel are bought in

Before beginning a proof of concept, banks and credit unions should ensure that all necessary stakeholders are onboard and invested in the one or two vendors being vetted, including senior leadership responsible for the digital channels. A proof of concept shouldn’t be used as an opportunity to change the CEO’s mind about a certain digital strategy or solution. If the resulting prototype is successful and meets the predetermined goals, then it should be possible for a decision to be made. Otherwise, it’s a poor use of both the institution and vendor’s time, money and personnel.

Selecting a digital banking solution that facilitates, supports and sustains a bank or credit union's digital goals and strategies rivals the importance often associated with core processing. Because this decision is so critical, many FIs are turning to proof of concepts. With a properly executed proof of concept, banks and credit unions can gain the clarity needed to find the vendor that can provide the platform required for a successful digital transformation.